What do you think about it?
I have interesst in this topic, primarily in PRO-arguments.
THANX A LOT
Subsidies for low-cost carriers.
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Subsidies for low-cost carriers.
Are subsidies for low-cost carriers a necessary investment in regional development?
What do you think about it?
I have interesst in this topic, primarily in PRO-arguments.
THANX A LOT
What do you think about it?
I have interesst in this topic, primarily in PRO-arguments.
THANX A LOT
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airazurxtror
- Posts: 3769
- Joined: 17 Nov 2005, 00:00
Subsidies are helps provided by a public authority such as State, Region, etc...
In the European Union, the European Commission allow subsidies to be given only to regional airports, and under specific conditions - not, I think, to air carriers as such, even low-cost carriers.
See the European Commission decision of February 12, 2004, about state aids to Ryanair at Charleroi.
( Regional airports are those with less than 5 millions passengers per year, 10 millions at the most, under special circumstances).
In the European Union, the European Commission allow subsidies to be given only to regional airports, and under specific conditions - not, I think, to air carriers as such, even low-cost carriers.
See the European Commission decision of February 12, 2004, about state aids to Ryanair at Charleroi.
( Regional airports are those with less than 5 millions passengers per year, 10 millions at the most, under special circumstances).
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AFApresident
- Posts: 371
- Joined: 01 Jun 2004, 00:00
- Contact:
Subsidies should NOT be given to airlines and certainly not in Belgium and most part of Europe. There are plenty of airlines, and they'll come to your airport if their is a market for it.
As for subsidies to airports, the government should help building the airport infrastructure since it's a public good like streets.
However a government should also wisely spends its money. It is a bad idea if every province or region in Belgium tries to create a huge airport, since in the end you'll just be throwing money away.
Than you far better invest it in a good legal system in which the aviation industry can thrive. (Good laws, not buidling houses near airports etc etc). That is a lot better than just investing for example E100 million in an airport, when you have 10 better airports in a 100 mile radius. You better use that E100 million than for another industry, an educational system etc.
As for subsidies to airports, the government should help building the airport infrastructure since it's a public good like streets.
However a government should also wisely spends its money. It is a bad idea if every province or region in Belgium tries to create a huge airport, since in the end you'll just be throwing money away.
Than you far better invest it in a good legal system in which the aviation industry can thrive. (Good laws, not buidling houses near airports etc etc). That is a lot better than just investing for example E100 million in an airport, when you have 10 better airports in a 100 mile radius. You better use that E100 million than for another industry, an educational system etc.
Sorry, but searching primarily for PRO arguments, does not out the thing into the right view.
There is from my point of view only one reason to allow subsidies: It does, theoretically, make no difference if a regional government is building road, a train line or is putting money in an airline in order to become more attractive. This is theretically, because in order for the region to gain from it, certain other conditions have to be met:
1. Only support inbound pax - no reason of supporting a money flow to London for weekend shopping.
2. Be sure that the inbound flow will remain after the subsidies for starting a route have stopped.
3. Make sure that the passengers which will most likely be attracted, will stay in your region and spend money there.
But I think there are much more CONS:
This is the perfect way to suck money from local authorities - regional governments would compete by giving more and more money and it would costs the regions more and more and this will outweigh any positive financial outcome for the region. If a route would be profitable, the airline would fly it anyway, so no reason to allow local governeurs to buy publicity at the cost of the people. Even more, since the airport is most of the time at least partially owned by the local government.
Regards, Bernhard
There is from my point of view only one reason to allow subsidies: It does, theoretically, make no difference if a regional government is building road, a train line or is putting money in an airline in order to become more attractive. This is theretically, because in order for the region to gain from it, certain other conditions have to be met:
1. Only support inbound pax - no reason of supporting a money flow to London for weekend shopping.
2. Be sure that the inbound flow will remain after the subsidies for starting a route have stopped.
3. Make sure that the passengers which will most likely be attracted, will stay in your region and spend money there.
But I think there are much more CONS:
This is the perfect way to suck money from local authorities - regional governments would compete by giving more and more money and it would costs the regions more and more and this will outweigh any positive financial outcome for the region. If a route would be profitable, the airline would fly it anyway, so no reason to allow local governeurs to buy publicity at the cost of the people. Even more, since the airport is most of the time at least partially owned by the local government.
Regards, Bernhard